Educational policy analysis archives

Educational policy analysis archives

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Educational policy analysis archives
Arizona State University
University of South Florida
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Educational policy analysis archives.
n Vol. 12, no. 31 (July 02, 2004).
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b Arizona State University ;
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University of South Florida.
c July 02, 2004
Colorados Voucher Law : examining the claim of fiscal neutrality / Kevin G. Welner.
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1 of 23 A peer-reviewed scholarly journal Editor: Gene V Glass College of Education Arizona State University Copyright is retained by the first or sole author, who grants right of first publication to the EDUCATION POLICY ANALYSIS ARCHIVES EPAA is a project of the Education Policy Studies Laboratory. Articles published in EPAA are indexed in the Directory of Open Access Journals. Volume 12 Number 31July 2, 2004ISSN 1068-2341Colorado’s Voucher Law: Examining the Claim of Fiscal Neutrality Kevin G. Welner University of Colorado, BoulderCitation: Welner, K. G., (2004, July 2). Colorado's voucher law: Examining the claim of fiscal neutral ity. Education Policy Analysis Archives, 12 (31). Retrieved [Date] from a/v12n31/.AbstractColorado's voucher law was declared unconstitutiona l by the Colorado Supreme Court on June 28, 2004. Voucher su pporters have begun drafting revised legislation designed to address the legal problem. This article calls into question the key financial claim of revenue neutrality—a claim that was centra l to the promotion and passage of the departing voucher law. The author concludes that the voucher law was not revenue neut ral, even though it attempts to exclude from eligibility thos e children already enrolled in private schools. In fact, this law, as well as any revised law with similar eligibility provisions, would actu ally cost taxpayers an additional $10 million per year once fully imple mented because the eligibility provision provides little more than a short-term damper on the law's long-term fiscal impact.SummaryColorado’s school voucher law, called the Colorado Opportunity Contract Pilot Program, was found unconstitutional by the state Supreme Cou rt on June 28th ( Owens v. Colorado Congress of Parents 2004). Immediately, the law’s chief legislative s ponsor declared that she will draft revised legislation for the followin g legislative term (Sarche, 2004). This revision, she explained, would address the court’s legal concern. It would likely, however,


2 of 23 leave untouched another concern – one that was neve r addressed when the original legislation was enacted in 2003.At the time, the state was in the midst of a budget crisis, and legislators from both parties were disinclined to support any bills that required increased expenditures. Accordingly, the voucher bill was promoted as revenue neutral. To ac complish this, the bill excluded from eligibility those children already enrolled in priv ate schools. The bill thus avoided the extensive costs that would have resulted if the sta te took on an obligation to pay for the education of these existing private school students Colorado’s official legislative fiscal analyst supported the claim of fiscal neutrality. T he analyst routinely prepares a ‘fiscal note’, which accompanies legislation as it makes it s way through the house and senate. The note for the voucher bill concludes, “No additi onal state funding will be required for the Colorado Opportunity Contract Pilot Program.” Yet t he law’s key eligibility exclusion, barring students already enrolled in private school amounts to little more than a short-term damper on what would have been the law’s long-term fiscal impact. This exclusion did not and could not apply to students entering kindergarten – students who have never before enrolled in any school, whether public or private.The Colorado law was targeted at low-income student s who live in the attendance areas of low-performing public schools. For children enterin g first grade or beyond, the eligibility provisions include attendance in public school. For those entering kindergarten, however, this provision was inapplicable, and the only remai ning eligibility criteria required that the child’s family be low-income and live within the bo undaries of a neighborhood school rated “low” or “unsatisfactory.” Students meeting these e ligibility criteria for children entering kindergarten are already (pre-voucher-policy) enrol led in private schools. That is, some low-income families in these attendance areas curre ntly choose to enroll their children in private school even without the benefit of a vouche r. Accordingly, a current snapshot of private school e nrollments would include a subset of students who are low-income and who live in the eli gible attendance areas. If, under the 2003 voucher law, future such families received a v oucher, the state would have begun picking up the tuition tab for this subset of stude nts. By projecting twelve years into the future, one can understand how this eligibility pro vision would have undermined the voucher law’s fiscal neutrality. High school senior s in 2016 would have entered school as kindergarteners in the fall of 2004. Virtually ever y student then enrolled in private school who could satisfy residency and income requirements would have begun as a kindergartener with a chance to obtain a voucher. T he provision excluding from eligibility those children already enrolled in private schools would become progressively meaningless with each passing year and would have b ecome virtually obsolete in 2016. This study estimates the fiscal effect of the taxpa yer subsidization of this likely group of voucher recipients who would attend private school irrespective of voucher availability. It identifies two significant fiscal impacts – one for taxpayers and one for public school districts: 1) Once the voucher law was fully implem ented, it would have cost taxpayers an additional amount of approximately $10 million per year. 2) Once the voucher law was fully implemented, it would have provided an additional s ource of funding to the participating school districts, in estimated amounts ranging from $12,000 annually for St. Vrain Valley School District to over $1.8 million annually for D enver Public Schools. Neither of these conclusions bears directly on the merits of the voucher law. A conclusion that the voucher law was not fiscally neutral says nothing about whether the law is good public policy. In fact, the recipients that are the focus of this analysis are children and families that are, by definition, low income and wh ose local school is rated as “low” or “unsatisfactory” by the state. One could make a sou nd public policy argument that


3 of 23 taxpayers should provide financial assistance to th ese families. Similarly, a conclusion that the voucher law would have resulted in additional f unding to the participating school districts says nothing about these districts’ level of need. The participating districts are called upon to administer the law, and this would h ave generated attendant costs that may or may not have been covered by the other funding p rovided to the districts. Moreover, these school districts have been identified by the state as in need of improvement, and the additional resources may have provided much-needed help in that regard. This analysis simply does not attempt to address such issues.Introduction The United States Supreme Court recently removed th e federal establishment clause barrier to school voucher programs ( Zelman v. Simmons-Harris 2002). Colorado’s new voucher law (HB03-1160), officially named the “Colo rado Opportunity Contract Pilot Program,” was the nation’s first postZelman voucher policy. The U.S. Congress recently passed a voucher law for Washington D.C., with stud ent eligibility provisions very similar to Colorado’s.The Colorado law was expressly designed to be fisca lly neutral. To accomplish this, the law was written to exclude from eligibility those c hildren already enrolled in private schools. (Note 1) It also maintained the same allocation per student The official ‘fiscal note’ attached to the bill by the legislative fiscal anal yst concludes, “No additional state funding will be required for the Colorado Opportunity Contr act Pilot Program.” While the legislation was pending, I joined in warn ing of three ambiguities with the potential to undermine the law’s fiscal neutrality (Howe & We lner, 2003). One of these ambiguities was directly addressed through an amendment by the legislation’s authors. (Note 2) A second ambiguity – appearing to expand eligibility to all private school students in grades 1-3 residing in the attendance areas of low-scoring public schools – persisted in the law’s language. However, the state Department of Educatio n interpreted the clause so as to exclude such student eligibility. (Note 3) Yet a third ambiguity remained, in part because the re exist few ways to remove it. Although, as noted above, the voucher law excludes from eligibility those children already enrolled in private schools, this provision cannot apply to those students entering kindergarten – students who have never before enrol led in school. These entering low-income kindergarteners are made eligible if the y live within the boundaries of a neighborhood school rated “low” or “unsatisfactory. ” (Note 4) As set forth below, some students fitting this description are already (prevoucher-policy) enrolled in private schools. Some low-income families in these attendance areas choose to enroll their children in private school even without the benefit of a vouche r. Accordingly, a current snapshot of private school enrollments would include a subset o f students that are low-income and who live in the eligible attendance areas. If future su ch families receive a voucher, the state will begin picking up the tuition tab for an additional subset of students, and the Colorado law will lose its revenue-neutrality.In reality, this is not so much an ambiguity as a straightforward shortcoming of the power of legislation to distinguish among the inner thoughts of potential beneficiaries. A voucher law cannot be designed to exclude families who would ha ve chosen private school even without the availability of vouchers. There is simp ly no sensible means of identification, even if it were somehow good policy to do so. (Note 5) Yet, by projecting twelve years into the future, on e can understand how this eligibility provision would undermine the fiscal neutrality of the law. High school seniors in 2016


4 of 23 would have entered school as kindergarteners in the fall of 2004. Virtually every student then in school who could satisfy residency and inco me requirements would have begun as a kindergartener with a chance to obtain a voucher. (Note 6) The only significant exceptions would be those students who moved into t he state or into a voucher-eligible attendance area (as explained below) after the chil d turned seven years of age. (Note 7) Thought of another way, the voucher law contains a key provision that was supposed to guarantee revenue neutrality: the provision excludi ng from eligibility those children already enrolled in private schools. But this provision wou ld have become progressively meaningless with each passing year and would have b ecome virtually obsolete in 2016. The purpose of this study is to estimate the fiscal effect of the taxpayer subsidization of this likely group of voucher recipients who would attend private schools irrespective of voucher availability.To move forward with this analysis, one need not kn ow the proportion of entering low-income kindergarteners that would have attended private school notwithstanding the availability of vouchers. Instead, the necessary as sumption is that the vast majority of such kindergarteners would have indeed pursued vouchers. This is akin to assuming that someone purchasing a $25,000 car will, if given the choice, opt to have someone else pay the purchase price. It is grounded in the same basi c principle underlying the voucher policy itself: that parents will make rational choices. A low-income parent who has already decided to send her child to private school is like ly to seek the voucher subsidy. This article calculates the cost of that subsidy by combining two approaches. Due to differences in data availability between Denver and the rest of the state, the Denver calculations use extensive data on private school a ttendance and free and reduced-lunch numbers. The calculations for the remainder of the state apply national rates to particular Colorado school districts. Each of these calculatio ns yield estimates of how many of the state’s future voucher recipients would have attend ed private schools irrespective of voucher availability. As set forth below, this esti mate, in turn, yields estimates of two significant fiscal impacts: one for taxpayers and o ne for public school districts. In particular, the following analysis concludes tha t once the voucher law was fully implemented it would have cost taxpayers approximat ely $10 million additional per year. It would also have provided an additional source of fu nding to the participating school districts, in estimated amounts ranging from $12,00 0 annually for St. Vrain Valley School District to over $1.8 million annually for Denver P ublic Schools. (Note 8) Limits of this AnalysisGiven a statewide dataset with fields linking stude nt eligibility for free or reduced lunch (FRL), public school attendance area, and actual sc hool attended, this analysis would be fairly straightforward. However, the actual analysi s makes due with more limited data. Assumptions are necessary at almost every step, but each assumption is justified and the more conservative path is generally pursued.Another cautionary note concerns the policy implica tions of this analysis. A conclusion that the voucher law would not have been fiscally neutra l says nothing about whether the law is good public policy. In fact, the recipients that ar e the focus of this analysis are children and families that are, by definition, low income and wh ose local school is rated as “low” or “unsatisfactory” by the state. Families such as the se are currently (before the availability of vouchers) paying for private schools notwithstandin g a limited ability to do so. One could make a sound public policy argument that taxpayers should provide financial assistance to these families. The present analysis does not attem pt to address this issue; instead, the


5 of 23 sole focus is to provide information about the actu al cost of the program. Similarly, a conclusion that the voucher law would have resulted in additional funding to the participating school districts says nothing about t hese districts’ level of need. In fact, the additional funding may be good public policy. The d istricts were called upon to administer the law, and this would have generated attendant co sts that may or may not have been covered by the other funding provided to the distri cts. Moreover, these school districts have been implicitly identified by the state as in need of improvement, and the additional resources may have provided needed help in that reg ard. Again, this analysis does not attempt to address such issues.BackgroundLike most American voucher programs, Colorado’s was means-tested – meaning that it was expressly designed to benefit students from low -income families. These students have, as a general matter, been under-served in Ame rica’s public schools, with a result being that their measured achievement lags behind t heir more advantaged peers; means-tested vouchers promise to provide some immed iate relief to these students and their parents (Howe, 1997).HB 1160 was crafted to avoid certain criticisms com monly leveled at voucher programs. Among the most prominent are that vouchers (1) most benefit the already advantaged by indifferently subsidizing their tuition expenses (v oucher programs often provide a voucher amount that covers only a portion of tuition charge s such that many lower-income families could not afford to pay the difference); (2) result in private school “skimming” of the most able public school students; and (3) harm public sc hools by diverting their funding to private schools.As just discussed, under the Colorado’s law student s already attending private schools are ineligible. Also, participating students must eithe r be at-risk or live in the attendance area of an under-performing school. These facets of the law help to address criticisms 1 and 2, above.The law addresses the third criticism by leaving wi th the home school district some of the per-pupil operating revenue (PPOR) for each voucher student. Under the state’s foundation grant system, the state calculates the a ppropriate PPOR for each school district and then allocates sufficient state funding to the districts after accounting for local revenues (40-50% of the PPOR funding is generated l ocally). The voucher law requires the public school districts to locally administer t he policy. To fund this administration and other costs, full PPOR for each voucher student is provided to the district; voucher money is then deducted from school district budgets at a rate of 85% of PPOR for high school, 75% for elementary and middle school (grades 1-8), and 37.5% for kindergarten. (Note 9) The districts retain the difference. This provision significantly reduces the likelihood that public schools would have been financially harmed b y diverting their funding to private schools.The law has three general requirements for students to be eligible to participate. Students must (1) reside in one of eleven identified school districts in which at least eight schools received an academic performance rating of “low” or “unsatisfactory” in the 2001-02 school year, (Note 10) (2), be eligible for free or reduced-cost lunches, and (3) be either entering kindergarten or have attended a public school in th e year prior to application. A fourth requirement is tied to grade level. Studen ts in grades 4-12 must have performed unsatisfactorily on one of the CSAP tests. For chil dren in grades k-3, for whom CSAP test


6 of 23 data is unavailable, the law identifies two alterna tive ways to become eligible. Students must reside in the attendance area of a school rate d “low” or “unsatisfactory,” or lack “overall learning readiness,” based on certain risk factors or low performance on certain reading assessments.In the first year of the program, participation was to be capped at 1% of a participating school district’s enrollment. This cap increases ea ch year, stopping at 6% in the 2007-2008 school year, when the legislation was exp ected to be reviewed by the legislature. In the event that a school district wa s faced with more eligible applicants than available vouchers, priority was to be first given to present participants and then to their siblings. Remaining slots would be filled by lotter y. (Note 11) The Colorado Department of Education developed a fl ow chart to help explain the eligibility requirements. This chart is reproduced here as Appe ndix D (and can also be found at The part of this chart that presents the kindergarten eligibility exception is along the left-hand margin, concerning students “4 years and older but under the age of 7” in the fall of a given school year. As this chart makes clear, such children are eligible if they res ide “in an attendance area of a neighborhood school with a low or unsatisfactory st ate rating.”Analysis Due to differences in data availability, this analy sis is divided into two parts. The Denver calculations use extensive data on private school a ttendance and free and reduced-lunch (FRL) numbers. The calculations for the remainder o f the state apply national rates to particular Colorado school districts. The logic beh ind these calculations is straightforward: by estimating how many how many of the state’s futu re voucher recipients would have attended private schools, irrespective of voucher a vailability, one can calculate an estimate of the additional cost to the state’s taxpayers.DenverData concerning the current attendance of FRL-eligi ble students attending private schools in Denver were obtained from three sources – the U. S. Department of Agriculture, the Denver Public Schools, and the Archdiocese of Denve r. (Note 12) These three institutions produced substantially consistent numbers. (Note 13) The data identify at least 1,473 FRL-receiving stud ents presently attending private schools in Denver. (Note 14) Of these, 1,246 attend schools that include kinder garten and other primary grades. Ultimately, the goal of this analys is is to forecast the additional expenditures by Colorado taxpayers (and additional allocations to public school districts), as the law would have moved toward full implementat ion. To do this, I will first arrive at an estimate, per grade level, of the number of low-inc ome students presently attending private schools in Denver.The private schools enrolling the 1,246 students re ferenced above vary from k-5 to k-12 schools. Accounting for the number of grade levels served at each particular school yields a figure of 142.5 low-income students per primary g rade level currently enrolled in private school in Denver (see Appendix A). (Note 15) But, while all these students are income-qualified, some of them will nonetheless not be eligible to participate because they do not live in the attendance area of a low or unsatisfactory DPS elementary school. Seventy-one p ercent of DPS schools are rated low or unsatisfactory; 29% are rated average or higher. Students who live in the attendance


7 of 23 area of one of this latter group of higher-achievin g schools would not be eligible for vouchers, even if they themselves qualify for FRL.Assuming that Denver’s low-income students are even ly distributed geographically and assuming that the student population in each attend ance area is approximately equal, then we can predict that 71% of the 142.5 students (101 students) per grade level qualify pursuant to both the income requirement and the att endance area requirement. But one would not expect such an even distribution. Rather, one would expect that more of the current private school low-income students live in the neighborhoods with the most low-income families. That is, assuming that the cho ice of a low-income family of whether or not to attend a private school is made independent of the family’s residence, then the rate would not vary by attendance area, and the attendan ce areas with higher numbers of low-income families would produce more such familie s attending non-public schools. In the following example I will, for simplicity’s s ake, call the 71% of DPS schools that are ranked low or unsatisfactory “Group A” schools; the 29% higher-ranked schools are then in “Group B.” Imagine two attendance areas, one for a school ranked low (i.e., in Group A) and one for a school ranked high (in Group B). Each area includes 1,000 kindergarten-aged children. The attendance area of the low-ranked school has a poverty rate of 80% (approximately 800 kindergarteners qual ify for FRL); the attendance area of the high-ranked school has a poverty rate of 40% (a pproximately 400 kindergarteners qualify for FRL). If the rate of opting for private school among low-income families is one percent, then the first group would produce eight s uch kindergarteners, while the second would produce only four.In actuality, the percentage of low-income students in low and unsatisfactory DPS schools averages over twice that of higher-ranked schools ( 84% versus 36%). (Note 16) Given the 84/36 ratio, we can make the conservative assumptio n that current private school low-income students are twice as likely to live in Group A attendance areas than in Group B attendance areas. (Note 17) Is this a reasonable assumption? On the one hand, w e might expect low-income families who live in wealthier areas to have more social cap ital and to be more efficacious and more likely to be active choosers. The friends, nei ghbors, and other contacts of these families are probably more educated and informed ab out how to negotiate the process of school choice. But we also might expect more famili es to opt for a private school if their local public school is less successful. For instanc e, one-quarter of students enrolled in DPS’s Steck Elementary receive FRL. But the school is highly ranked. A low-income family in the Steck attendance area may opt for private sc hool, but the impetus is likely to be religious beliefs or some other nonacademic criteri on. In contrast, DPS’s Ford Elementary (with 90% FRL) has an unsatisfactory rating. A lowincome family in the Ford attendance area may choose a non-public school for similar rel igious reasons but is also more likely to make such a choice based on academic considerations Overall then, the assumption that current private s chool low-income students are twice as likely to live in Group A attendance areas than Gro up B attendance areas seems reasonable. (Note 18) Applying this assumption to the data, we come up w ith 1.82 students per grade level in Group A school attendance areas, and 0.91 students per grade level in Group B school attendance areas (see below calculat ion). Since there are 65 Group A schools in DPS, this results in a figure of 118 pri vate school students (65 x 1.82) per grade level who qualify pursuant to both the income requi rement and the attendance area requirement.


8 of 23 The per pupil operating revenue (PPOR) in DPS is $6 ,350.56. For these 118 students, the current annual PPOR expenditure is $749,366. But th is is just for one grade level. As the policy was implemented, the cohort of eligible kind ergartens would have advanced toward 12th grade, and a new cohort of eligible kindergartener s would fall in behind the first. Thirteen years from the time of the policyÂ’s initia tion, the additional annual cost to taxpayers becomes $9,367,076. (Note 19) This figure is an approximation of the additional taxpayer expenditure, after full implementation, fo r students in the DPS schoolsÂ’ attendance areas. (Note 20) Before moving on to the other school districts, I s hould note that not all the private schools currently enrolling FRL students were on the list o f Denver area schools approved for participation in the voucher program. As shown in A ppendix A, eight Denver schools currently serving low-income students and currently enrolling a total of 36.6 such students per grade level, were not among the private schools approved by DPS to receive voucher students. (Note 21) Some low-income families who would have strongly d esired to attend the non-approved schools (or who receive other fina ncial assistance) may have opted to eschew vouchers. Since the focus here is on enterin g kindergarteners, the choice is not one of leaving such a non-approved school; rather, the choice is to change an initial preference in favor of a school on the approved lis t. (Note 22) If we assume that voucher availability would not ha ve factored at all into the choice process, the subtraction of these non-approved scho ols reduces the 142.5 students per grade level to 105.9. This, in turn, reduces the we ighted distribution estimate to 87, the annual per-grade increase to $553,134, and the full implementation estimate to $6,914,172. The midway assumption is of 124.2 stude nts per grade level, a weighted estimate of 103, an annual per-grade increase of $6 52,203, and a full implementation estimate of $8,152,531. Table 1 Range of Results for Denver Assumption as to whether voucher availability will change choice of private school Qualifying students per grade in eligible private schools Annual cost per grade level Total annual cost No effect87$553,134$6,914,172 Affecting 50% of choices 103$652,203 $8,152,531 Total effect118$749,366$9,367,076 For the remainder of this analysis, the $8,152,000 figure will be used as the best estimate


9 of 23 of additional annual taxpayer costs associated with the kindergarten eligibility exception as it applies to students in the DPS attendance area.The Ten Other School DistrictsTo arrive at estimates for the other ten Colorado s chool districts where students are eligible for vouchers, I turn to national data conc erning the likelihood that a low-income student will attend a private school. This second p art of the analysis requires several unsatisfactorily grounded assumptions. At each such juncture, the analysis uses conservative assumptions and estimates, almost cert ainly resulting in a figure that is below the actual cost likely to have beed incurred as the voucher policy was implemented. In the absence of better data, however, these conservative assumptions offer the best available option for an analysis of this nature.Alt and Peter (2002), using data from the NCES “Sch ools and Staffing Survey (SASS),” state that 49.5% of U.S. private schools in the 199 9-2000 school year enrolled at least one FRL student (Alt & Peter, 2002, p. 12, table 6). In those schools, 10.4% of students were FRL recipients. Therefore, we can arrive at a conse rvative estimate that approximately 5% of private school students nationally were eligible for FRL. (Note 23) According to the Colorado Department of Education, private schools in the state enrolled over 57,000 students in 2002 (CDE, 2003a). Five per cent, or 2,850, of these students are presumed FRL-eligible. In 2002, Colorado’s public s chools enrolled 212,000 FRL students (CDE, 2003b), so approximately 1.3% of Colorado’s F RL students attended private school (2,850/214,850).This 1.3% figure can then be applied to the attenda nce area of each low or unsatisfactory public school in the remaining ten school districts For instance, Altura Elementary in Aurora school district enrolls 440 students, 183 (4 1.6%) of whom are FRL recipients. Taking 1.3% of 185 (Note 24) yields an estimate of 2.4 low-income students from the Altura attendance area currently attending private school. Since Altura serves six grade levels, this works out to 0.4 students per grade le vel. The table in Appendix B presents such results for all eligible schools in the ten sc hool districts. These calculations yield estimates of 255 eligible elementary-aged private-s chool students, or 42 per grade level. One concern here is that the statewide FRL and atte ndance numbers include, and are heavily influenced by, the population of Denver. Gi ven the more reliable data available to calculate DPS numbers, Denver is excluded from this second analysis. But, if there are truly only 2,850 FRL private school students in the state, we have already determined that Denver has about half of these. Moreover, of the 21 2,000 public school students receiving FRL, 44,000 (21%) are in Denver.Similarly, this second analysis fails to account fo r differences between the ten remaining voucher-eligible school districts and the other 167 Colorado districts (besides DPS). These other districts collectively enroll approximately 4 3% of all FRL public school students in the state even though they enroll approximately 57% of Colorado’s public school students. As a group, these 167 districts average 21% FRL-recipi ent students. In comparison, the ten remaining voucher districts average 29% FRL-recipie nt students. Such comparisons demonstrate that these ten districts collectively h ave lesser FRL enrollment than DPS but greater FRL enrollment than the 167 districts not p articipating in the voucher policy. The following analyses take a conservative approach and adjust the numbers downward in an attempt to account for the effect of Denver; the y do not include a countervailing upward adjustment to account for the presumed difference b etween the ten districts and the remaining Colorado school districts. Specifically t he analyses include an adjustment based


10 of 23 on FRL numbers relative to DPS (see Figure A). For instance, Aurora’s FRL rate is only 0.56 that of DPS, so the 0.4 students-per-grade-lev el figure for Altura Elementary is again reduced. In total, these adjusted calculations yield estimat es of 151 (instead of 255) eligible elementary-aged private-school students in the ten districts, or 25 per grade level. As shown in Appendix C, the unadjusted total cost to t axpayers would be slightly over $3 million at the point of full implementation. Once t he DPS adjustment is added, the cost is reduced to $1,846,000. To determine how sensitive t his figure is to the earlier estimate that 1.3% of Colorado’s FRL students currently attend pr ivate school, the cost calculation was also performed using figures of 1.2% and 1.4%. The Denver-adjusted figure declines to $1,702,000 when the rate decreases to 1.2%; it rise s to $1,990,000 when the rate increases to 1.4%. (Note 25) That is, a change in the amount of 0.1% changes th e total cost by $144,000 (slightly over 9%). Nonetheless, u sing 1.3% as the best conservative estimate, and adding the $1,846,000 cost to the mid way DPS cost figure, the total cost can be estimated at $9,998,000. Table 2 Total Cost of Kindergarten Eligibility Exception Adjustment for effect of Denver Denver midway cost Remaining ten districts’cost to taxpayers Total cost to taxpayers No$8,152,000$3,067,000$11,219,000Yes$8,152,000$1,846,000 $9,998,000 Thus, $10 million is a conservative best guess of t he additional annual costs incurred as a result of the eligibility provision regarding kinde rgarteners. This amount represents the full-implementation cost – after the initial cohort of kindergarteners would have worked its way up to the 12th grade, in 2016. One would have expected a cost of only $400,000 in year one, followed by annual increases of $800,000 (e.g., $1.2 million in year two and $2 million in year three), reaching the $10 million fi gure in year 13 (see Figure B).


11 of 23 Additional Payments to School DistrictsAs noted earlier, the Colorado voucher law containe d a provision designed to reduce the likelihood that public schools would be financially harmed by the diversion of their funding to private schools. Voucher funding was structured as an alteration to the regular foundation grant system. The law called for the sta te to send each school district an allotment sufficient to fund the usual full PPOR fo r each voucher student. Voucher money is then deducted from school district budgets at a rate of 85% of PPOR for high school students, 75% for elementary and middle school (gra des 1-8) students, and 37.5% for kindergarteners. The school districts retain the di fference. Since the law also required school districts to adm inister the policy, and since school districts have fixed costs that would not be reduce d by the transfer of voucher students into private schools, the money retained by the school d istricts may or may not have been enough to offset district-level financial costs of the policy. The present analysis does not attempt to address that issue.Instead, this analysis simply estimates the amount school districts would have received and retained, above and beyond the amount intended and accounted for in earlier analyses. The following table sets forth those addi tional amounts for each of the eleven school districts. Table 3 Gains to School Districts Due to Kindergarten Eligi bility ExceptionSchool DistrictPPORGain to district from kinder-garten voucher payments Gain to district from grade 1-8 voucher payments Gain to district from grade 9-12 voucher payments Total annual gain to school district, unadjusted Total annual gain to school district, adjusted for DPS District percent of total gain, adjusted for DPS Aurora (Adams-Arapahoe $5,734.88$17,061$109,193$32,758$159,012 $89,047 4.0%


12 of 23 28J) Colorado Springs (El Paso County 11) $5,724.64$8,730$55,870$16,761$81,360 $40,680 1.8% Colorado Springs (Harrison 2) $5,928.39$7,043$45,073$13,522$65,637 $58,417 2.6% Commerce City (Adams 14) $6,194.60$7,019$44,922$13,476$65,417 $66,071 3.0% Denver Public Schools $6,350.56$81,763$1,308,215$392,465$1,782,443 $1,782,443 80.6% Greeley (Weld County 6) $5,772.55$11,153$71,382$21,414$103,95 $75,883 3.4% Jefferson County (Jefferson R-1) $5,746.78$6,450$41,278$12,383$60,111 $13,825 0.6% Northglenn/Thornton (Adams 12) $5,734.88$6,660$42,620$12,786$62,065 $21,102 1.0% Pueblo City (Pueblo 60) $5,789.51$2,895$18,527$5,558$26,980 $24,012 1.1% St. Vrain Valley Schools $5,781.31$4,560$29,185$8,755$42,500 $11,900 0.5% Westminster (Adams 50) $5,877.32$5,116$32,740$9,822$47,677 $29,083 1.3% Total $158,449$1,799,003$539,701$2,497,152 $2,212,464 The figures used as a basis for this calculation ar e, for DPS, 103 students per grade level (which generated the $8,152,000 figure for overall taxpayer cost) and, for the other ten districts, private school attendance of 1.3% of eac h district’s FRL students. As is true of the $10 million taxpayer-cost figure, this amount represents the full-implementation cost – after the initial cohort of kindergarteners would have worked its way up to the 12th grade, in 2016. Even in DPS, the district that wou ld have expected to receive the largest gain, the first-year benefit wo uld be only $143,000, followed by annual increases of $285,000, reaching the $1.8 million fi gure in year 13.ConclusionNotwithstanding the Colorado Supreme Court’s findin g that the current voucher law is unconstitutional, voucher proponents will likely pu rsue revised legislation designed to address the local control issue that formed the bas is of the Court’s decision. That is, the expected revisions will make substantial changes to the overall flow of money – designed to take school districts out of the monetary sequen ce – although the fiscal impact for the state would be essentially unchanged from that desc ribed above. (Note 26) The costs estimated here are not large compared to the overall state education budget


13 of 23 ($2.4 billion for k-12 education in fiscal year 200 3-04). However, at a time when public schools are financially strapped, $10 million is re al money. Perhaps more importantly, debates about vouchers should be grounded in comple te, factual information. As stated at the outset of this article, the conclusion that Col orado’s voucher law is not fiscally neutral does not establish whether the law was good public policy. Sound reasoning may support the policy, even at the added cost of $10 million a nnually. Yet it is this question of whether the voucher plan is desirable at this added cost which policy makers should have considered – not the imagined fiscally neutral poli cy that was actually considered and adopted.Notes 1. Throughout this paper, I use the term “private scho ol” to refer to all nonpublic schools, including Catholic, other religious, and secular. 2. This issue concerned the possibility that students in grades 4-12 and attending private schools would be eligible for vouchers because of w ording making eligible those students who did not take the Colorado state assessments. 3. Section 22-56-104(2)(b)(II) provides for eligibilit y of low-income children as follows: For children entering or enrolled in one of grades one through three, the child: (A) Was continuous enrolled in and attending a publ ic school during the previous school year; (B) Lacks overall learning readiness attributable t o at least three significant family risk factors, as described in section 22-28-106; or (C) Resides in an area in which the child's neighbo rhood school, as defined in section 22-1-122(2)(c), is a public school in the s chool district that received an academic performance rating of "low" or "unsatisfac tory" pursuant to section 22-7-604(5). Notwithstanding the fairly clear wording, the state Department of Education’s eligibility flowchart implicitly but unambiguously interprets t his provision to require that “A” be satisfied in all cases and that the student also mu st satisfy either “B” or “C”. This flowchart is available online at ownload/flowchart.pdf and is reproduced here as Appendix D. My analysis here sim ply accepts the Department of Education’s interpretation, although I continue to urge a legislative clarification in order to head off any confusion or litigation. 4. The Department of Education flowchart (Appendix D) diverges again here from the plain language of the statute. Instead of focusing on gra de level (kindergarten versus later grades), the flowchart focuses on the child’s age. Accordingly, for children seven years of age and older, the eligibility provisions include a ttendance in public school. For those under seven years old, this provision does not appl y, and the only remaining eligibility criteria require that the child’s family be low-inc ome and live within the boundaries of a neighborhood school rated “low” or “unsatisfactory. ” The basic analyses presented here are not, however, affected in any meaningful way by this different interpretation. 5. To avoid this problem, the legislation could have m ade eligibility contingent upon the student enrolling for some set amount of time (e.g. one or two years) in public school. As a practical matter, this would mean that many voucher -eligible families would enroll their child in kindergarten and/or first grade and then m ove to private school. Although this would filter out many families that always intended to pursue a private school education


14 of 23 and would thus mitigate the taxpayer costs discusse d herein, it would not necessarily be good policy and would almost surely lead to familie s ‘gaming’ the system. 6. Notwithstanding their eligibility, some of these st udents would not have taken advantage of voucher availability due, e.g., to lack of infor mation about the program. However, given that the relevant persons here are parents who have already elected to choose a private school education for their children, one would not expect this to happen in many instances. 7. Because low-income families have higher rates of tr ansience, this is not a minor exception. Many such moves may not actually disrupt voucher eligibility (i.e., moving from one voucher-eligibility attendance area to another) but others undoubtedly will. This analysis does not attempt to include such transienc e in the calculations. 8. An earlier analysis projected a financial loss to t he public school districts in an amount exceeding $89 million annually (CEA, 2003). This fi gure represents the amount of money required to be sent on to the private schools. The policy effect of this lesser allocation at each district will likely depend on a variety of di strict-specific issues, such as whether the district is facing overall declining enrollment or, in contrast, overcrowding. The present analysis does not attempt to address that issue. In stead, the fiscal issue addressed herein is focused on the fiscal impact of the kindergarten eligibility exception described above. 9. Kindergartens are funded at half of PPOR, so the 37 .5% rate is set at the same proportion as for students in grades 1-8 (75%). 10. Performance ratings are based on the CSAP, or Color ado Student Assessment Program tests, which include assessments in reading and writing in grades 3 through 10, in mathematics in grades 5 through 10, and in scien ce at grade 8. 11. This analysis proceeds on the assumption that the p articipation caps will have no effect on the financial impact of the kindergarten eligibi lity exception. This is because the number of possible students that would have received vouch ers based on this eligibility exception is much smaller than the participation caps. The on ly instance where the cap may have become a factor would be the first year in DPS, whe n the enrollment cap is 1%, or 685 students. This compares to an estimate of 103 stude nts taking advantage of the eligibility exception. 12. I thank all three institutions for their assistance particularly the Archdiocese, whose schools account for the vast majority of the privat e school enrollment of Denver’s low-income students. 13. In cases of inconsistencies, the numbers were avera ged. The author recognizes the inaccuracy of this approach and welcomes clarifying information. 14. The FRL numbers used in this analysis are a conserv ative underestimate of eligible students, since the category “FRL-receiving student s” should be distinguished from “FRL-qualified students.” A FRL-qualified student a ttending a private school does not necessarily receive FRL. This is also true of FRL-q ualified students attending public schools, but it is likely a greater issue for priva te schools, which may choose to eschew the FRL program because of lack of facilities or a prin cipled choice to refuse governmental assistance. 15. Information about grade levels served was obtained from publicly available sources, such as the schools’ web sites. The author welcomes updated or corrected information. 16. Almost all schools in Northwest Denver have at leas t 75% FRL.


15 of 23 17. Initially, of course, we have to make the justifiab le assumption that the public school attendance data reflect overall poverty rates in th e attendance area. 18. As noted earlier, this analysis does not incorporat e any low-income kindergarteners who reside outside the enrollment areas of qualifyi ng public schools. However, the voucher statute includes an eligibility provision for such kindergarteners, so long as they qualify as “at-risk” under any of seven different definitions (e.g., if either of the child’s parents was less than 18 and unmarried when the child was born, or if the child’s parent or guardian has not completed high school or received a GED). 19. Kindergarten is funded at only half of normal PPOR. 20. This figure does not take into account the annual i ncreases in PPOR, pursuant to the requirements of Colorado’s Amendment 23, passed by voters in 2000. 21. This is particularly likely in the case of the Kuns berg School, which is associated with the National Jewish Medical and Research Center and which serves students with medical needs. 22. This analysis also does not account for the small n umber of students who currently move from public to private schools after kindergar ten or the number who currently move from private back to public schools. It is likely t hat the addition of vouchers would, after the plan is fully implemented, change both these figure s. For instance, assume that Joe, in 2003, moved to a private school between grades 2 an d 3. This same hypothetical Joe would do the same in 2005, but now he would do so w ith financial assistance from the voucher. Similarly, assume Karen moves from private school to public school after first grade in 2003. Project ahead to a different Karen i n 2007. She began in private school, with the help of a voucher, in 2005. In 2007, her f amily is less likely to move her to public school, since her private education is funded throu gh the voucher. Since the costs are now externalized, they no longer serve as an incentive favoring public school. Because the overall number of low-income private school student s is currently small, the number of Joes and Karens would also be small. It is reasonab le to project some additional cost to taxpayers because of such students, but any project ion would require too many ungrounded assumptions.Another movement pattern that may have changed, due to the externalization of the costs of private school, concerns the return of students to public school after the primary grades (see table below, describing national patterns). Table 4 Private Schools and Enrollment PrimarySecondaryCombination Schools61%9%30%Enrollment55%16%30% Source: Broughman & Colaciello (2001). 23. One of the assumptions here is that the private sch ools with FRL students are the same size as those without. In fact, one would expe ct the latter group of schools to have smaller overall enrollments. Broughman and Colaciel lo (2001) point out that Catholic schools are much less likely to be small than nonse ctarian or other religious schools. And Catholic schools also are the most likely to enroll low-income students (Alt & Peter, 2002). Alt and Peter (2002) also note that about 25% of pr ivate school respondents did not know whether they enrolled any FRL students. Therefore, the 49.5% figure is probably also an


16 of 23 underestimate. Moreover, the low-income enrollment numbers are probably higher for schools serving the relatively low-income neighborh oods where students are eligible for vouchers. Given all this, the 5% figure is likely o n the conservative side. 24. The calculation begins with the number of FRL stude nts in public school and then adds approximately 1.3% of that number to reach the appr oximate number of FRL students attending both public and private school in the pub lic school’s attendance area. The final calculation then takes 1.3% of the sum of these num bers to arrive at the estimated private school number. This approximation only works becaus e the percentage of low-income students attending private school is quite small. 25. This sensitivity analysis is particularly important when one takes into account the derivation of the 1.3%. Recall the estimate that ap proximately 5% of private school students nationally are eligible for FRL. For the r easons set forth in an earlier footnote, this 5% figure is probably a substantial underestimate. Were the estimate to be raised to just 6%, the 1.3% figure would correspondingly increase to 1.6%, and the total cost attributable to the remaining ten districts would increase to $2 ,278,000. 26. This analysis does not attempt to address the local control or constitutionality issues. However, such an analysis (in the context of simila r legislation) can be found in Bartels & Welner (2004).ReferencesAlt, M. N., & Peter, K. (2002). Private Schools: A Brief Portrait. (NCES 2002–013) MPR Associates, Inc. U.S. Department of Education, NCES Washington, DC: U.S. Government Printing Office.Bartels, B. & Welner, K. G. (2004). Colorado Charter School Authorization and Funding Reform: An Analysis of HB 04-1141 Boulder, CO: EPIC Policy Center. Available online at, S.P., & Colaciello, L.A. (2001). Private School Universe: 1999–2000 (NCES 2001–330) U.S. Department of Education, NCES. Washington, D C: U.S. Government Printing Office.Colorado Department of Education (2003a). Fall 2002 Non-Public School Pupil Membership Available online at ll2002NPSbyGrade.pdf Colorado Department of Education (2003b). K-12 Free and Reduced Information--As of October 1, 2002 Available online at 003FRREDUCED03rev1.pdf Colorado Education Association (2003). Financial Impact of House Bill 03-1160 to Affected School Districts Available online at ia/hb1160.impact.pdf Howe, K. R. (1997). Understanding equal educational opportunity: Social justice, democracy, and schooling New York: Teachers College Press. Howe, K. R. & Welner, K. G. (2003). An Analysis of Colorado's School Voucher Proposals Boulder, CO: EPIC Policy Center. Available online a t v. Colo. Cong. of Parents (slip opinion, Colorado Supreme Court). Available online


17 of 23 at nID=4688 Sarche, J. (2004, August 28). Colo. supreme court s trikes school vouchers. Rocky Mountain News Available online at /0,1299,DRMN_15_2996408,00.html Zelman v. Simmons-Harris 536 U.S. 639 (2002).About the AuthorKevin G. WelnerSchool of Education University of Colorado Boulder, CO 80309-0249(303) 492-8370E-mail: kevin.welner@colorado.eduB.A. University of California, Santa Barbara, 1985J.D. University of California, Los Angeles, 1988Ph.D. University of California, Los Angeles, 1997Kevin G. Welner is an Assistant Professor at the Un iversity of Colorado at Boulder's School of Education, and co-director of CU-Boulder' s Education and the Public Interest Center ( p). He is the author of Legal Rights, Local Wrongs: When Community Control Collides with Educational Equity (SUNY Press, 2001). His homepage is at http://education.colorado .edu/faculty/welnerk/Appendix A Denver Private Schools Enrolling Students Who Receive Free or Reduced LunchName of private school Grade levels served Number of grade levels served Current number of FRL students FRL students per grade level Approved by DPS to receive voucher students Our Lady of Fatima Catholic School k-8910.11Yes Notre Dame Catholic School k-8940.44Yes Good Shepherd Catholic k-8940.44Yes Saint Bernadette School k-8940.44Yes Our Lady of Lourdes Catholic School k-8970.78Yes Saint JohnÂ’sLutheran School k-5650.83Yes


18 of 23 Blessed Sacrament Parish School k-8980.89Yes Saint John Evangelist k-89121.33 St Andrews Lutheran k-45102.00 Saint James Catholic School k-89192.11Yes Saint Clare Asissi k-89202.22 Saint Catherine of Siena k-89212.33Yes Assumption Catholic School k-89242.67 Saint Anthonyk-89283.11Escuela Tlatelolco Centro de Estudios k-1213604.62 Loyola Catholic School k-67446.29Yes Love Christian Fellowship Educational Center k-1213987.54Yes GuardianAngelsÂ’ School k-89829.11Yes Escuela de Guadelupe k-677010.00 Inner-City Christian School k-566310.50Yes Kunsberg Schoolk-788510.63Saint Rose of Lima k-8911212.44Yes Presentation of Our Lady k-8914015.56Yes Saint Francis de Sales k-8914516.11Yes Annunciationk-8918020.00Yes Total:142.5 Appendix B Current Private School Voucher-Eligible Students


19 of 23 Appendix C Cost to Taxpayers of Kindergartener Eligibility Appendix D Flowchart Illustrating Eligibility of Students for the Colorado Opportunity Contract Pilot Program The World Wide Web address for the Education Policy Analysis Archives is Editor: Gene V Glass, Arizona State UniversityProduction Assistant: Chris Murrell, Arizona State University General questions about appropriateness of topics o r particular articles may be addressed to the Editor, Gene V Glass, or reach him at College of Education, Arizona State Universi ty, Tempe, AZ 85287-2411. The Commentary Editor is Casey D. Cobb: .EPAA Editorial Board Michael W. Apple University of Wisconsin David C. Berliner Arizona State University Greg Camilli Rutgers University Linda Darling-Hammond Stanford University Sherman Dorn University of South Florida Mark E. Fetler California Commission on TeacherCredentialing Gustavo E. Fischman Arizona State Univeristy Richard Garlikov Birmingham, Alabama Thomas F. Green Syracuse University Aimee Howley Ohio University Craig B. Howley Appalachia Educational Laboratory William Hunter University of Ontario Institute ofTechnology Patricia Fey Jarvis Seattle, Washington Daniel Kalls Ume University Benjamin Levin University of Manitoba Thomas Mauhs-Pugh Green Mountain College Les McLean University of Toronto Heinrich Mintrop University of California, Los Angeles Michele Moses Arizona State University Gary Orfield Harvard University Anthony G. Rud Jr. Purdue University Jay Paredes Scribner University of Missouri


20 of 23 Michael Scriven University of Auckland Lorrie A. Shepard University of Colorado, Boulder Robert E. Stake University of Illinois—UC Kevin Welner University of Colorado, Boulder Terrence G. Wiley Arizona State University John Willinsky University of British ColumbiaEPAA Spanish & Portuguese Language Editorial Board Associate Editors Gustavo E. Fischman Arizona State University & Pablo Gentili Laboratrio de Polticas Pblicas Universidade do Estado do Rio de JaneiroFounding Associate Editor for Spanish Language (199 8—2003) Roberto Rodrguez Gmez Universidad Nacional Autnoma de Mxico Argentina Alejandra Birgin Ministerio de Educacin, Argentina Email: Mnica Pini Universidad Nacional de San Martin, Argentina Email:, Mariano Narodowski Universidad Torcuato Di Tella, Argentina Email: Daniel Suarez Laboratorio de Politicas Publicas-Universidad de Bu enos Aires, Argentina Email: Marcela Mollis (1998—2003) Universidad de Buenos Aires Brasil Gaudncio Frigotto Professor da Faculdade de Educao e do Programa dePs-Graduao em Educao da Universidade Federal F luminense, Brasil Email: Vanilda Paiva Lilian do Valle Universidade Estadual do Rio de Janeiro, Brasil Email:


21 of 23 Romualdo Portella do OliveiraUniversidade de So Paulo, Brasil Email: Roberto Leher Universidade Estadual do Rio de Janeiro, Brasil Email: Dalila Andrade de Oliveira Universidade Federal de Minas Gerais, Belo Horizont e, Brasil Email: Nilma Limo Gomes Universidade Federal de Minas Gerais, Belo Horizont e Email: Iolanda de OliveiraFaculdade de Educao da Universidade Federal Flumi nense, Brasil Email: Walter KohanUniversidade Estadual do Rio de Janeiro, Brasil Email: Mara Beatriz Luce (1998—2003) Universidad Federal de Rio Grande do Sul-UFRGS Simon Schwartzman (1998—2003) American Institutes for Resesarch–Brazil Canad Daniel Schugurensky Ontario Institute for Studies in Education, Univers ity of Toronto, Canada Email: Chile Claudio Almonacid AvilaUniversidad Metropolitana de Ciencias de la Educaci n, Chile Email: Mara Loreto Egaa Programa Interdisciplinario de Investigacin en Edu cacin (PIIE), Chile Email: Espaa Jos Gimeno SacristnCatedratico en el Departamento de Didctica y Organ izacin Escolar de la Universidad de Valencia, Espaa Email: Mariano Fernndez EnguitaCatedrtico de Sociologa en la Universidad de Sala manca. Espaa Email: Miguel Pereira Catedratico Universidad de Granada, Espaa Email: Jurjo Torres Santom Universidad de A Corua Email: Angel Ignacio Prez Gmez Universidad de Mlaga


22 of 23 Email: J. Flix Angulo Rasco (1998—2003) Universidad de Cdiz Jos Contreras Domingo (1998—2003)Universitat de Barcelona Mxico Hugo Aboites Universidad Autnoma Metropolitana-Xochimilco, Mxi co Email: Susan StreetCentro de Investigaciones y Estudios Superiores en Antropologia Social Occidente, Guadalajara, Mxico Email: Adrin Acosta Universidad de Guadalajara Email: Teresa Bracho Centro de Investigacin y Docencia Econmica-CIDE Email: bracho Alejandro Canales Universidad Nacional Autnoma de Mxico Email: Rollin Kent Universidad Autnoma de Puebla. Puebla, Mxico Email: Javier Mendoza Rojas (1998—2003) Universidad Nacional Autnoma de Mxico Humberto Muoz Garca (1998—2003)Universidad Nacional Autnoma de Mxico Per Sigfredo ChiroqueInstituto de Pedagoga Popular, Per Email: Grover PangoCoordinador General del Foro Latinoamericano de Pol ticas Educativas, Per Email: Portugal Antonio TeodoroDirector da Licenciatura de Cincias da Educao e do Mestrado Universidade Lusfona de Humanidades e Tecnologias, Lisboa, Portugal Email: USA Pia Lindquist WongCalifornia State University, Sacramento, California Email: Nelly P. Stromquist


23 of 23 University of Southern California, Los Angeles, Cal ifornia Email: nellystromquist@juno.comDiana RhotenSocial Science Research Council, New York, New York Email: Daniel C. LevyUniversity at Albany, SUNY, Albany, New York Email: Ursula Casanova Arizona State University, Tempe, Arizona Email: Erwin Epstein Loyola University, Chicago, Illinois Email: Carlos A. Torres University of California, Los Angeles Email: Josu Gonzlez (1998—2003) Arizona State University, Tempe, Arizona EPAA is published by the Education Policy Studies Laboratory, Arizona State University


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